Client money protection FAQs: Everything landlords need to know about client money protection

As of 1st April 2019, client money protection will become mandatory for the UK’s lettings agents. From the first of the month, any business that manages rented properties will need to belong to an approved client money protection scheme to protect landlord money, or risk being fined up to £30,000.

While the law applies to letting agents, it has serious implications for landlords, too. Working with an agent who does not belong to an approved scheme will put your money at riskwhich could spell lengthy court cases with no guarantee that your rental income will be retrieved.  

Landlords need to stay informed to ensure that they and the agents they work with comply with the law. With that in mind, here’s everything that you, as a landlord, need to know about client money protection.


How can I be sure my choice of agent is a client money protection scheme member?

A good letting agent should already be aware of client money protection. If they are a member of a body like ARLA, RICS, NALS or UKALA, they will have access to client money protection through their membership.

In addition, Client Money Protect  – part of Hamilton Fraser – has been running a voluntary scheme since 2013 and protects the money of over 800 agents. The government will announce the first schemes to have been authorised to provide client money protection following its mandatory introduction imminently.


Are there certain client money protection standards that a letting agent should adhere to?

With our Client Money Protect membership, yes. All client money covered by the scheme should be held in a separate designated account. They must also comply with our minimum professional indemnity insurance requirements, and be continued members of a recognised consumer redress scheme.

They must also agree for us to display their membership details on our website, agree to our terms of membership, and clearly display the CMP logo prominently within every single one of their lettings branches. In addition, they must provide you as the landlordas well as your tenantswith comprehensive information about client money protection and their membership of our CMP scheme.


How can I be sure my agent is holding my money correctly?

Credit and fraud checks are carried out on all client money protection scheme members, and they will also be asked to prove that they not only have a separate bank account for money covered by the scheme, but that this account is actually being used for the correct purpose.


I want to make a client money protection claim. How do I go about it?

If a landlord is worried about the safety of their money and has not been able to settle the matter with the agent, the landlord can make a claim to the CMP scheme. Claims can only be made if the money has been stolen by the owner of the agency, not if it still remains in the designated account or the business is still trading.


Are there any limitations to the claims that can be made?

Under the legislation, the client money protection schemes should offer full cover to landlords. You may wish to enquire directly with the relevant scheme as to whether there are any limitations to their cover. The Hamilton Fraser client money protection scheme, CMP, does provide full cover subject to the following exclusions:

  • Theft of tenant money by an employee (rather than the owner) of the letting agency
  • Theft of money already protected, or held by an authorised Tenancy Deposit Protection Scheme
  • Bank failure

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